ALJDEC decisions subject to certification as final

2016A-177-ROC · Registrar of Contractors · 2016-07-21

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: July 6, 2016, at 1:00 p.m. APPEARANCES: Barbara McAlister (“Complainant”) appeared on her own behalf; R M B Inc. dba, Apple Construction Company Coast Garage Doors (“Respondent”) appeared through Kim Barnes (“Ms. Barnes”), its Project Manager. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT On January 12, 2006, the Registrar of Contractors (“the Registrar”) issued License No. KB-1.215332-D to Respondent. On or about January 14, 2016, Complainant filed a complaint with the Registrar alleging that Respondent had performed poor work in its repair of water damages at her residence at 1622 E. El Corro, Fort Mohave, Arizona 86426. The complaint did not allege that Respondent had installed the wrong bathtub or that Respondent was responsible for releveling or repairing the supports underneath her residence. The Registrar assigned the complaint to its Investigator Cliff Corlett (“Investigator Corlett”) for investigation. Investigator Corlett performed a jobsite inspection on February 22, 2016. Investigator Corlett’s inspection notes observed that the project was an insurance repair job and that he could not substantiate three of Complainant’s nine specific items of complaint, including the item added at the jobsite inspection. Inspector Corlett’s jobsite inspection notes opined that since Respondent had replaced the bathtub, the plumbing that it performed to attach the tub to the house’s plumbing and septic systems was not incidental to its repairs. Therefore, it should have hired a licensed plumber to hook the tub up to the plumbing and septic systems. On March 2, 2016, Investigator Corlett on behalf of the Registrar issued a Directive that required Respondent on or before 5:00 p.m. on March 24, 2016, to correct by appropriate means six items: (1) The wavy, bumpy linoleum floor; (2) The stain on the door casing, which did not match the existing bathroom door or the wood floor in the bedroom; (3) The bathroom door molding, which was installed backwards; (4) The bathroom door, which did not operate properly and needed to be adjusted; (5) The broken baseboard at the master bedroom door; (6) The gasket seal in the tub drain, which appeared to be improperly situated and perhaps leaking.[1] Investigator Corlett testified that through an oversight, the March 2, 2016 Directive was not immediately mailed to the parties. Investigator Corlett testified that on March 8, 2016, both parties contacted him. Investigator Corlett testified that he personally mailed the Directive to the parties on March 8, 2016, and that the mail usually takes two days. Inspector Corlett testified that he emailed the Directive to Respondent, but that he did not have an email address for Complainant. Investigator Corlett testified that although normally he would put a header on the Directive that provided an extended compliance deadline, which in this case would have been March 30, 2016, he did not modify the Directive before he mailed it out. Investigator Corlett testified that on March 30, 2016, he received a telephone call from Respondent, stating that Complainant had refused to provide access for Respondent to complete repairs. Investigator Corlett testified that he called Complainant and reminded her of his error, but that she said that she was tired of waiting for Respondent and that it needed to have completed all repairs by March 24, 2016. Investigator Corlett testified that he performed a compliance inspection on April 14, 2016. Respondent had worked on all the items in the March 2, 2016 Directive, but four minor repairs remained incomplete: (1) There were minor bubbles in the linoleum on the side of the toilet; (2) There were staples and nail holes showing in the wood molding that required caulking; (3) Although Respondent had repaired or replaced the frame that was installed backwards, Respondent still needed to apply putty over staples and nail holes; and (4) Although Respondent had widened and re-cased the door frame and adjusted the door so that it operated smoothly, the wood was a little rough and needed to be sanded and smoothed.[2] Investigator Corlett testified that at that point, he sent the case to the Registrar’s Legal Department. On April 18, 2016, the Registrar issued a Citation against Respondent’s license, charging cause to suspend or revoke Respondent’s license under A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108, A.R.S. § 32-1154(A)(12), namely A.R.S. § 32-1158(B), and A.R.S. § 32-1154(A)(22). Respondent filed a timely written answer to the Citation, denying any cause to discipline Respondent’s license. The written answer affirmatively alleged that Complainant had refused to provide reasonable access to allow Respondent to comply with the Registrar’s Directive. The Registrar referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing. A videoconference hearing was held on July 5, 2016, from the Registrar’s Flagstaff office. Complainant testified and submitted twenty exhibits. Respondent’s Project Manager, Ms. Barnes, testified and submitted 19 exhibits. Investigator Corlett also testified. Complainant’s residence is an older mobile home. Respondent’s project was to repair water damage to Complainant’s bathroom pursuant to her insurance company’s line item authorization. Respondent submitted the parties’ contract that stated that it would charge $3,384.42 to complete the work that was described on the insurance adjuster’s estimate.[3] The contract did not include an estimated date of completion, advise Complainant that she had the right to file a complaint with the Registrar against Respondent for a violation of A.R.S. § 32-1154(A) within the time allowed by A.R.S. § 32-1155(A), or include the Registrar’s website address and telephone number. Both parties submitted the adjuster’s or insurance companies’ line items of approved repairs.[4] These approved repairs did not include leveling the mobile home or repairing the supports under the mobile home. Complainant stated that Respondent had replaced the garden tub with a smaller tub and submitted photographs of the two tubs.[5] Ms. Barnes that it replaced the tub with a size that the insurance company required.[6] Complainant submitted an email from the manufacturer that the tub was not designed to withstand direct sunlight.[7] Respondent submitted a photograph that showed that the window in the bathroom was above the toilet, on the west wall, and did not allow light to shine directly on the tub.[8] Complainant submitted an invoice from a mobile home service in the amount of $895.00 for releveling her mobile home and repairing its supports.[9] Ms. Barnes testified that releveling the mobile home had nothing to do with this job. She testified that she had releveled the mobile home at one time, but did not charge Complainant for the service. Complainant testified that Respondent had damaged her piano. Complainant submitted an estimate that it would cost $9,051.87 to redo Respondent’s repairs.[10] Ms. Barnes testified that Respondent hired a licensed plumber to fix the drain in the bathtub. Ms. Barnes testified that when Complainant refused to allow Respondent to complete its repairs, it was 99% done and would have only need a few hours to complete all repairs. CONCLUSIONS OF LAW The Registrar has jurisdiction to discipline contractors’ licenses for contracting law violations. However, “[t]he Registrar’s power is limited to suspending or revoking a contractor’s license, or attaching conditions to the license. Money damages may not be awarded.”[11] Complainant bears the burden of proof to establish cause to suspend or revoke Respondent’s contractor’s license by a preponderance of the evidence.[12] Respondent bears the burden to establish affirmative defenses by the same evidentiary standard.[13] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[14] “Procedural due process requires notice and an opportunity to be heard in a meaningful manner and at a meaningful time.”[15] Complainant’s complaint did not apprise Respondent or the Registrar that the size of the tub, the composition of the tub, the location of the tub, the damaged piano, or the levelness and allegedly damaged supports of her mobile home would be at issue. Investigator Corlett did not have an opportunity to investigate these alleged workmanship deficiencies and Complainant did not amend her complaint to add these alleged deficiencies. Due process does not allow Complainant to amend her complaint at the hearing. Because Respondent’s contract incorporated by reference the insurance adjuster’s itemized list of authorized repairs, A.R.S. § 32-1158[16] does not require Respondent to restate the scope of work in its contract. The insurance adjuster’s itemized list of repairs that both parties submitted did not include leveling the mobile home or repairing its supports. However, Respondent’s contract did not include an estimated date of completion or advise Complainant that she had the right to file a complaint with the Registrar against Respondent for a violation of A.R.S. § 32- 1154(A) within the time allowed by A.R.S. § 32-1155(A), or include the Registrar’s website address and telephone number. Therefore, Complainant established cause to discipline Respondent’s license under A.R.S. § 32- 1154(A)(12),[17] namely A.R.S. § 32-1158. Complainant also complained that Respondent performed plumbing work when it installed the tub, which was beyond the scope of its license, and that the contract required a different size of tub. Complainant did not establish that the parties’ contract required Respondent to install a different tub. Respondent established that it used a licensed plumber to repair the tub. Moreover, A.R.S. § 41-1092.05(D) required the Registrar to issue a Citation that included “[a] reference to the particular sections of the statutes and rules involved.” The Citation did not charge a violation of A.R.S. §§ 32- 1154(A)(2)[18] or 32-1154(A)(16),[19] Complainant did not request to amend the Citation. Therefore, the Administrative Law Judge cannot recommend that the Registrar discipline Respondent’s license for the size of the bathtub it installed or for initially installing the bathtub without using a licensed plumber. Investigator Corlett testified that Complainant did not allow to complete repairs during the time that he informed Complainant that she should have allowed due to a clerical error. Normally, the Registrar will not suspend a contractor’s license for poor workmanship until it has had a reasonable opportunity to correct its workmanship.[20] Respondent established that it did not have a reasonable chance to fully correct its workmanship. Because Complainant’s failure to provide reasonable access is a legal justification for Respondent’s failure to complete its repairs, Complainant did not establish cause to discipline Respondent’s license under A.R.S. § 32-1154(A)(3),[21] namely A.A.C. R4-9-108,[22] or A.R.S. § 32- 1154(A)(22).[23] In any event, Complainant’s testimony indicated that she wants damages, not repairs, and because the Registrar cannot award damages, she will need to seek that relief in civil court. RECOMMENDED ORDER Based on the foregoing, it is recommended that on thirty days after the effective date of the final order in this matter, Respondent R M B, Inc. DBA: Apple Construction Company Coast Garage Doors’ License No. KB- 1.215332-D shall be suspended until it provides written proof to the Registrar that is acceptable to the Registrar that it has revised its form contract to comply with the requirements of A.R.S. § 32-1158. It is further recommended that if on or before thirty days after the effective date of the final order in this matter, Respondent provides written proof to the Registrar that is acceptable to the Registrar that it has revised its form contract to comply with the requirements of A.R.S. § 32-1158, Complainant Barbara McAlister’s administrative complaint in Case No. 2016-177 shall be dismissed. In the event of certification of the Administrative Law Judge Decision by the Director of the Office of Administrative Hearings, the effective date of the Order will be five days from the date of that certification. Done this day, July 21, 2016.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors ----------------------- [1] See Complainant’s Exhibit C-2. [2] See Complainant’s Exhibit C-3. [3] See Respondent’s Exhibit 11. [4] See Respondent’s Exhibit 19 and 20; Complainant’s Exhibit C-4. [5] See Complainant’s Exhibit C-5. [6] See Respondent’s Exhibit 16. [7] See Complainant’s Exhibit C-17. [8] See Respondent’s Exhibit 10. [9] See Complainant’s Exhibit C-19. [10] See Complainant’s Exhibit C-18. [11] J.W. Hancock Enterprises, Inc. v. Arizona State Registrar of Contractors, 142 Ariz. 400, 406, 690 P.2d 119, 125 (App. 1984) (quoted in Sunpower of Arizona v. Arizona State Registrar of Contractors, 166 Ariz. 437, 440, 803 P.2d 430, 433 (App. 1990)). [12] See A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119(A) and (B)(1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). [13] See A.A.C. R2-19-119(B)(2). [14] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [15] Webb v. Arizona Board of Medical Examiners, No. 1 CA-CV 01-0010 at ¶ 9 (Arizona Court of Appeals, Division One, June 25, 2002) (citing Comeau v. Arizona State Board of Dental Examiners, 196 Ariz. 102, 106, ¶ 18, 993 P.2d 1066, 1070 (App. 1999)). [16] A.R.S. § 32-1158(B) provides that any contract in an amount of more than one thousand dollars entered into between a contractor and the owner of a property to be improved after December 31, 2007 must be in writing and must include the following minimum terms: 1. The name of the contractor and the contractor’s business address and the license number. 2. The name and mailing address of the owner and the jobsite address or legal description. 3. The date the parties entered into the contract. 4. The estimated date of completion of all work to be performed under the contract. 5. A description of the work to be performed under the contract. 6. The total dollar amount to be paid to the contractor by the owner for all work to be performed under the contract, including all applicable taxes. 7. The dollar amount of any advance deposit paid or scheduled to be paid to the contractor by the owner. 8. The dollar amount of any progress payment and the stage of construction at which the contractor will be entitled to collect progress payments during the course of construction under the contract. 9. That the property owner has the right to file a written complaint with the registrar for an alleged violation of section 32-1154, subsection A. The contract shall contain the registrar’s telephone number and website address and shall state that complaints must be made within the applicable time period as set forth in section 32-1155, subsection A. The information in this paragraph must be prominently displayed in the contract in ten point bold type. . . . [17] A.R.S. § 32-1154(A)(12) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[f]ailure in any material respect to comply with this chapter.” .” [18] A.R.S. § 32-1154(A)(2) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[d]eparture from or disregard of plans or specifications or any building codes of any state or any political subdivision of the state in any material respect which is prejudicial to another without consent of the owner or the owner’s duly authorized representative and without the consent of the person entitled to have the particular construction project or operation completed in accordance with such plans and specifications and code.” [19] A.R.S. § 32-1154(A)(16) includes among the grounds for suspension, revocation, and other disciplinary action against a contractor’s license, “[k]nowingly contracting beyond the scope of the license or licenses of the licensee.” [20] See A.R.S. § 32-1154(A)(22). [21] A.R.S. § 32-1154(A)(3) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[v]iolation of any rule adopted by the registrar.” [22] A.A.C. R4-9-108 requires that “[a]ll work shall be performed in a professional and workmanlike manner” and that “[a]ll work shall be performed in accordance with any applicable building codes and professional industry standards.” [23] A.R.S. § 32-1154(A)(22) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[f]ailure to take appropriate corrective action to comply with this chapter or with rules adopted pursuant to this chapter without valid justification within a reasonable period of time after receiving a written directive from the registrar.”

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